Dispensaries

File this in the “it could be worse” file. While the rules and regulations of medical marijuana facilities in Oregon are far from perfect, at least it doesn’t cost millions of dollars to get established. Medical marijuana dispensaries are not even allowed in all medical marijuana states. For those states that do allow medical marijuana dispensaries, the start up costs vary. Licensing fees are different in every state, as well as other expenses.

There is a trend in the medical marijuana industry – the newer the program, the more expensive the start up costs. When dispensaries popped up on the West Coast during the 2000-s, there were next to no regulations, and no licensing fees. Compare that to states like New Jersey and Massachusetts, which have heavy regulations and a limited number of dispensaries allowed.

Many people think that opening a medical marijuana dispensary is cheap and easy. However, that’s not the case, no matter which state you are operating in. There are a lot of expenses involved with a medical marijuana dispensary, such as staff related costs, building costs, equipment, heating bills, electricity bills, marketing, etc. And that doesn’t even include the medicine itself. It’s not as easy as renting a cheap space and putting a jar full of meds on the shelf.

In the case of one medical marijuana dispensary in Massachusetts, start up costs are in the millions. The New England Treatment Access is one of 20 medical marijuana dispensaries that received a license by the Massachusetts Department of Public Health earlier this year. Per MassLive.Com:

NETA is receiving a $9 million loan from Howard Kessler of Boston. Of that, $3.8 million will go to capital costs at NETA’s three locations, with $500,000 allocated at the Northampton site. The remaining $5.2 million will go to operating costs until NETA breaks even.

In its first year of operation, NETA hopes to net more than $700,000, assuming 1.6 ounces per patient per month and a price of $4,800 per pound. Projected revenue is $9.8 million for 2015, reaching $19 million by 2017, NETA states in its DPH filings. The dispensary hopes to reach a peak patient level of 3,200 in 2016.

This of course is the high end of medical marijuana businesses. One of the people on the payroll of New England Treatment Access is retired Democratic Congressman Barney Frank, who serves as New England Treatment Access’s Director of Government and Community Relations. Before starting a medical marijuana business, research the start up costs extensively, otherwise you run the risk of getting over extended financially. Make sure to calculate for unforeseen circumstances, which in the marijuana industry, are almost virtually guaranteed to happen.

Only six months after a grand opening, South Jersey's sole medical marijuana dispensary is struggling to survive.

This spring, Compassionate Care Foundation was planning to triple its production, using a $357,000 loan from the state Economic Development Authority. Simultaneously, the dispensary was preparing to convert cannabis leaves into liquid medicine, transdermal lotions, and lozenges, according to Bill Thomas, the nonprofit's CEO.

About 100 pounds of the leaves sit in brown grocery bags at the dispensary, waiting to be sent to a manufacturing plant in Pennsauken to be turned into the new products.

But where are the patients?

Located just outside Atlantic City, the dispensary has but 600, who currently can get only marijuana buds. The number is far short of what he needs to pay bills and support an expansion, Thomas said. For now, the $357,000 project to expand growing space is on hold.

When the nonprofit applied for one of six dispensary licenses offered three years ago by the state Department of Health, Compassionate Care projected it would have 5,000 patients upon opening and 10,000 in its second year. "Our cultivation facility has the capability of servicing up to 20,000 patients at two ounces per month," its bid said.

But so far, only 2,200 patients statewide have registered to buy cannabis.

Many patients complain that the application and doctor approval process takes three months, on average, and is too cumbersome for the program to succeed, Thomas said.

Patients also report they spend about $1,000 on doctor visits and registration "before they even get in the door" of the dispensary, he said.

Because of marijuana's uncertain status - it is still illegal under federal law - insurance does not cover the visits.

Mayor Martin J. Walsh moved this week to stymie the opening of two medical marijuana dispensaries in Boston, voicing his toughest opposition so far at a forum in Dorchester and firing off a letter to state officials urging swift action if inaccuracies are found in the companies’ applications.

“I am writing to express my serious concern regarding the two registered marijuana dispensary applicants in the city of Boston,’’ the mayor wrote in a letter dated Tuesday that was addressed to the state’s secretary of health and human services, John Polanowicz, and the executive director of the state’s medical marijuana program, Karen Van Unen.

Walsh said questions have been raised about the two companies, Green Heart Holistic Health & Pharmaceuticals Inc., which is eyeing a 3,000-square-foot dispensary at 70 Southampton St., and Good Chemistry of Massachusetts Inc., which has planned a store on Boylston Street.

He noted that the state is assessing the veracity of dispensary applications and urged “swift and uniform action” if inaccuracies are found, saying that would reaffirm confidence in the regulatory process.

“If any information provided in either application is confirmed to be inaccurate, I ask that the Department of Public Health immediately eliminate that application from being eligible for a final certification of registration,’’ Walsh wrote.

A state health and human services spokeswoman did not return repeated calls for comment Tuesday.

The letter follows public comments Walsh made during a community presentation Monday. The mayor said he is “dead set” against marijuana dispensaries, has long opposed medical marijuana laws, and would prevent stores in Boston that sell cannabis.

“I have made it very clear to the state that I don’t want these dispensaries in our city,’’ Walsh told about 200 people at Pleasant Hill Baptist Church, a small wooden house of worship on a corner of Humboldt Avenue, in a neighborhood where opposition to the marijuana dispensaries is fierce.

But Walsh probably faces an uphill battle to stop the shops, analysts said. With a voter-approved law establishing the dispensaries and a state licensing process underway, Walsh might be able to stall the process by using the city’s zoning laws, but ultimately would have little power to permanently ban the stores, said Jeffrey M. Berry, a Tufts University political science professor.

The east coast state of Massachusetts has been working on making medical marijuana available to patients for over a year now. But last Friday marked the day that the state granted out the first 20 (of more to come) licenses to run dispensaries. The shops will be spread throughout MA, including one in the high trafficked area of Boylston Street in the heart of Boston. Other cities that will contain the shops include Worcester, Newton, and Salem.

The state law says that there can be 35 license allowed but officials have decided to just start off with 20 to see how things go. It was promised that more licenses will be given out towards the summer months. The medical marijuana laws in Massachusetts also say that no county shall have more than five dispensaries. But since medical marijuana was approved by voters two years ago, these small steps bring cannabis a little bit closer to the patients in Massachusetts.

One of the clinics opening in MA, named Green Heart Holistic Health, are keeping their fingers crossed that they will be able to open their new shop at the end of the summer, located right across from Boston University Medical Center. They will have their grow site in Amesbury and will not just be growing THC concentrated strains but ones with good amounts of CBD as well, which will help patients that have MS, epilepsy, and cancer. The facility will most likely be a large indoor grow, with smaller plots outside for summer months, as growing marijuana in the cold east coast winters is extremely difficult (there are some people who seem to think that it's still possible to grow through four feet of snow... Trust me, I've spoken to these kinds of people).

The domino effect on the east coast is spreading. While Massachusetts is only allowing medical marijuana for terminal patients and not fully legalizing, it's still a huge step for the east coast. Support for cannabis is still gaining an incredible amount of momentum and with more people accepting the benefits of the plant, we can hope to see more states push for legalization. At least the east coast is finally managing to make moves in order to even out the country in regards to cannabis acceptance.

The list of companies vying to open Massachusetts’ first medical marijuana dispensaries has been pared down significantly, according to the latest numbers released Thursday by state regulators.

Just 100 organizations submitted applications by the 3 p.m. deadline, but roughly a third of those that survived the first-round cut in September chose not to go forward.

Many prospective applicants were apparently knocked out by recent rule changes that required each company to prove it has $500,000 cash available in its bank account for start-up costs.

Before the rule changes, regulators merely required the medical marijuana dispensary applicants to show that the money was pledged by investors in commitment letters.

Dr. Madeleine Biondolillo, director of the state health department bureau that oversees the process, said she is encouraged that there is a “robust” number of companies still in the running.

“There is a number of strong applicants who are willing to go through the process, and can assure us they can meet all the requirements, that they have the wherewithal financially and otherwise to able to be set up a coherent and effective business,” she said.

Seven weeks before the nation's first retail marijuana shops open in Colorado, federal authorities Thursday morning raided more than a dozen Denver metro area marijuana facilities.

In the largest federal raid on Colorado marijuana facilities since medical marijuana became legal, federal law enforcement agents with an assist from local police officers executed search and seizure warrants at multiple dispensaries and cultivation facilities throughout the region — at least a dozen in Denver alone.

At one raid in Boulder, a pile of seized marijuana lay in the snow like Christmas trees until a front-end loader scooped it up. At the VIP Cannabis dispensary in Denver, broken glass from a shattered front window littered the parking lot while masked agents hauled boxes of evidence into a U-Haul truck.

Police turned customers away. And the dispensary's website said it would be closed on Thursday and Friday.

Jeff Dorschner, spokesman for the U.S. Department of Justice in Denver, said the raids were being conducted by the Drug Enforcement Administration, Internal Revenue Service criminal investigations unit, the Denver Police Department and state and local law enforcement.

"Although we cannot at this time discuss the substance of this pending investigation, the operation under way today comports with the Department's recent guidance regarding marijuana enforcement matters," Dorschner said in his e-mailed statement to The Denver Post.

"As this is an on-going investigation, no additional information will be made available," he said.